by Jim Muttram

What is Innovation?

What is innovation? The Oxford English Dictionarydefines it, somewhat unhelpfully, as: “the action or process of innovating”; but, then elaborates: “a new method, idea, product, etc.” It then goes on to note: “innovation is crucial to the continuing success of any organization.”

As innovation is so important, I thought I would unpack the idea a bit. Many people think that “true” innovation is the invention of genuinely novel things which have never before been seen in the world. However, this is a very high bar at which virtually everyone would fail. Humans have been around for over 200,000 years and there are billions of us, so most things, one way or another, have been thought of before. In my view, this strict definition isn’t particularly helpful.

I think a more useful definition is something like this: “The recognition and implementation of an idea or combination of ideas which brings a unique utility not before seen or used which adds value by fulfilling a consumer need.”

I spent Christmas 2011 reading Steve Job’s biography by Walter Isaacson. I have always thought of Steve Jobs as intrinsically innovative; but, what was special about him was not that he came up with entirely new ideas – the graphical user interface on the Macintosh, for example, had been invented by Xerox Parc and there had been many MP3 players before the iPod – but, that he came up with unique combinations; which, taken together, added real, never-before-seen value to the consumer.

Take the iPod: As a music player, it was certainly very elegantly designed; but, its capacity was well below the best that was available–at the same price–on the market at the time. What Apple did was combine the player with the web (in the form of iTunes) in such a way as the combination was unique. Suddenly, tasks that were really difficult, or close to impossible to do on the player, could be done on the Mac, thus freeing the player to do what it did best: play music. And, by deconstructing the album into songs–and miraculously persuading the music industry to play ball–it created a huge new market for legal downloads. The rest, as they say, is history.

Or take the iPhone: There were smartphones before the iPhone; but, they weren’t very smart. The iPhone’s unique advantage, apart from the legendary great design, was the App Store. Suddenly, the phone could become whatever you wanted it to be; thus, the real revolution in smartphones that we are living through today was born.

Google provides another good example: Google’s revolutionary idea, apart from its blisteringly good search, was AdWords. But, Google didn’t invent key word advertising; that honour went to Idealab that spun-out GoTo.com which was later renamed Overture and was then bought by Yahoo!. However, it was Google who hit the jackpot with search advertising, and it did so by reinventing the model. Overture had ordered ads by whoever bid the most that quite often resulted in the top advertisement not being the most appropriate. It was simply the one with the deepest pockets.

Google changed the rules. It ordered results partly by the bidding and partly by the success of the ad which was measured by how many people clicked on it and on the quality of the ultimate landing page. And, it also limited the power of those with the deepest pockets by charging only one cent above the amount of the second highest bidder. These innovations revolutionised the medium.

So my argument is innovation comes from the real innovators who can be—and often are–those that take ideas already out there and reinvent and recombine them in ways which create real utility for the user. As Steve Jobs said, paraphrasing Picasso*: “Good artists copy; great artists steal.”

In the innovation process at RBI Data Solutions, we always try to think as broadly as we can about customer problems. Of course, we would love to invent some genuinely and completely novel services that the world has never seen; but, we are just as happy if we construct combinations of already-existing components, provided we produce an elegant solution in the end. We are not yet as good as Steve Jobs at this process, but we are working on it.

First published on the internal Reed Elsevier Innovation website, February 2012